What’s missing from Australia’s self-inflicted energy crisis, is reason and common sense. When you’ve dug yourself into a hole, the first remedial action is to stop digging.

Instead, Australia has a PM, Malcolm Turnbull and an Energy Minister, Josh Frydenberg, determined to wreck every last vestige of productive industry and enterprise in this country, while punishing households with the highest power prices in the world.

That determination is evidenced by their continual pandering to renewable energy rent-seekers and the eco-zealots that worship them.

Frydenberg is peddling his National Energy Guarantee, with all the grinning verve of a vaudeville showman.

Telling lies about power prices having already fallen (when, in fact, retail prices have jumped between 20 and 24% in those states reliant on renewables); and making ludicrous promises that, by increasing wind and solar capacity, power prices will plummet, further still.

As we’ve pointed out plenty of times before, adding heavily subsidised, and chaotically intermittent wind and solar to a power market necessarily, and absolutely inevitably, leads to rocketing power prices (see above a very simple graphic to that effect care of Dr Michael Crawford). After all, it’s what these policies were designed to do, so no one should be surprised at the outcome.

After Federal Labor by-election victories in Queensland, Tasmania and WA the threat of a Bill Shorten led Labor government looms.

It would, of course, be a repeat of the Green/Labor Alliance that ramped up John Howard’s tiny 2% RET and turned it into a 45,000 GWh monster, back in 2008.

Instead of slashing the Federal Large-Scale RET (pared back from 41,000 to 33,000 GWh by Tony Abbott in 2015), Frydenberg’s NEG simply expands it and extends it, indefinitely.

Number crunchers figure that the percentage of power delivered by wind and solar under Frydenberg’s NEG would end up well over 42%. Whereas, Bill Shorten is pushing for 50%. For Australian households and businesses, the economic result from either will be an unmitigated disaster.

The tricky choice for voters is like being asked to choose between hanging and a firing squad.

After the Liberal National Party’s pathetic showing in the Queensland seat of Longman and swings against the Liberal/National Coalition in Tasmania and WA, there’s every prospect that Malcolm Turnbull will be forced to walk the plank. And, within the Liberal/National party room, there is one issue that stands out from all others: and that’s power prices. For back-benchers facing voters ready to wield their electoral sledgehammers, what’s happened to Australia’s energy policy is front and centre.

At a moment when Turnbull and Frydenberg ought to be slashing subsidies to wind and solar; re-writing the power market dispatch rules to favour reliable, baseload sources (as they once did), instead of chaotically intermittent wind and solar (as they have done since 2008); and underwriting the refurbishment of existing coal-fired power plants and the construction of new High Efficiency Low Emissions plant, this pair sound more like lunatics from the hard-green left.

If there was any lesson from the Longman by-election – where the LNP candidate struggled to pick up 26% of the primary vote and Pauline Hanson’s One Nation picked up a solid 15% – it has to be that notionally conservative parties should stop pandering to the green-left, who will never vote for them, anyway. Instead, Liberals and Nationals need to stop apologising for the fact that Australia is powered by coal; to stop pretending that wind and solar will replace it; and start promoting reliable and affordable electricity, for all.

Terry McCrann and Alan Jones make much the same point in the interview below (podcast with transcript following).

Alan Jones: Back to this energy issue. This is a crisis. Make no mistake about it. Yesterday, we were treated to the absolutely unadulterated rubbish by this Energy Security Board, whoever the hell they are. It was established by the Council of Australian Government’s Energy Council, another bureaucratic nightmare, in August last year. Of course, they’re going to do the bidding of the government. They’ll tell government what government want to hear. It’s chaired by this woman Kerry Schott, whom I used to think had a few brains.

Yesterday we’re told the National Energy Guarantee, when it’s in place, will give us cheaper electricity. The Financial Review even played with this idiotic assumption, talking about savings of $550 a year, $150 more than was first estimated. Look, if the last election campaign, we had the Medi-scare campaign run up to this National Energy Guarantee, Labor will be responsible for higher electricity prices. Now I don’t know when I’ve heard anything quite so absurd or economically dangerous.

I mentioned to you earlier this week that BjørnLomborg is the world renowned director of the Copenhagen Consensus Centre. He actually believes in climate change and renewable energy. I don’t, but he believes in it. Yet no one could be more opposed to the stupidity of Turnbull and Frydenberg on one hand, and Shorten and Mark Butler, his shadow minister, than Bjørn Lomborg. Lomborg wrote last week, and I quote, “Worldwide, fossil fuels produce two thirds of all electricity, with nuclear and hydro producing another 27%.” Yet, “According,” he said, “to the International Energy Agency, solar, wind, wave, and bio-energy produce only 9.8% of electricity in the OECD,” and he said, “This is only possible because of subsidies,” that’s the renewable, “of more than $215 billion this year.”

Lomborg wrote, “Reliance on coal is not ending soon. It remains the cheapest and most dependable energy source. The International Energy Agency,” he said, not me, not Terry McCrann, Bjørn Lomborg said, “by 2040, coal will still be cheaper on average than solar and wind energy, even with a sizable carbon tax.” It’s a carbon dioxide tax, of course, but they call it a carbon tax. Lomborg went further when early this year he said, “Even if every nation, including the United States, extended its carbon dioxide promises past 2030, and kept them going throughout the century, temperatures would drop by less than 0.2 of a degree Centigrade.” Which prompts the question, what price are we paying for nothing?

As the Spectator Magazine argued in an editorial on June 30, not Terry McCrann, not me, quote, “The most dangerous aspect of this National Energy Guarantee fraud is that it requires the Paris Accord on climate change, with its plethora of emissions targets on everything from farting cows to tradies’ utes, to finally be legislated.” The editorial said, “Thanks to an ideologically-driven and vainglorious prime minister, his spineless and cowardly colleagues, a jaded and exhausted business community, and a gloating cohort of socialist bureaucrats and lefty politicians, the Paris Accord will soon go from being a non-binding aspiration to something that is enforceable by law. Economic suicide beckons,” it says.

Terry McCrann and I warned about this 10 years ago. One of my listeners, and my listeners are very plugged in, wrote to me yesterday, quote, “A succession of Australian governments decided to export our coal to manufacture our imported consumer durable products, rather than use Australian coal to manufacture our stuff in Australia. So Australia saves on its manmade emissions, but other countries incur those same manmade emissions in manufacturing our stuff. Therefore, our global warming cultists have, through forcing high cost electricity, renewably generated, on Australia, has resulted in the world not saving a gram of manmade carbon emissions.”

The Tomago chief executive, Tomago our biggest aluminium producer, said last month that renewables are unable to deliver reliable and affordable power to energy intensive users. He’s saying reverse the threat to base load power. Embrace coal fired power. As I’ve said many times, there’s only one simple policy needed to govern energy policy. You can take it in two sentences or three. It must be available. It must be reliable. It must be affordable. Renewable energy is none of these three.

The South China Morning Post on June 4 this year demonstrated that China is awake up to this. Quote, “Chinese Solar Power Stocks Plunge,” the headline said, “As The Government Moves to Contain the Industry.” It talked about the Chinese government, quote, “Paring back state support for solar power,” and quote, “All new wind farm development rights will be subject to competitive bidding.” They’re building coal fired power stations.

The former National Party leader, Deputy Prime Minister John Anderson last month called for the Turnbull government to intervene to ensure the construction of a high energy, low emission coal fired power station. Mr. Anderson said it was time to be utterly honest with ourselves for once in this country. His words, “For once in this country.” He said, “Emotion and ad hocery had consistently overruled reason in the energy debate.” He said, “The result is a massive sovereign risk for people who might otherwise have invested in base load power capacity.” He said “the time had come for tax payers to underwrite a new HELE coal fired power station to offset”, his words, “what is effectively a smashed market which can no longer operate normally.”

Now I said earlier this week, time to get back to Terry McCrann. He has seen and analysed the stupidity of all this in Victoria and South Australia just a couple of weeks ago. Around about July 7, when as Terry wrote, “The wind would have blown a dog off a chain,” in Southern Australia. Wind power everywhere, and as a result, as Terry wrote, “The wholesale price, according to the market regulator AEMO, dropped to just $10 a megawatt hour.” Could’ve dropped to zero. Wind power everywhere.

But then as Terry said, “Monday the wind, pretty much right across the southern states, had dropped to a gentle zephyr.” The total generation from wind dropped below 500 megawatts in South Australia, and less than 100 megawatts. So what happened to the price? The price in South Australia hit not $10 a megawatt hour, $14,000 a megawatt hour. For much of the day, it was over $1,000. On the whole of Monday, it averaged over $700 a megawatt hour. In Victoria, where the wind died away, but they still have coal fired power stations, it was over $78 a megawatt hour. Terry McCrann.

Now you couldn’t ask for a simpler or more easy to understand and utterly irrefutable on the ground demonstration of the utter insanity, as Terry said, of our rush to embrace functionally-useless, so called renewable power. Terry McCrann, good morning. Thank God for you.

Terry McCrann: Good morning, Alan. Great to hear your voice again

Alan Jones: Terry.

Terry McCrann: I absolutely second and endorse everything you just said. I’ve just got one slight qualification, and that’s what John Anderson is proposing, that governments get behind building a coal fired power station. In a way, that’s true, but it wouldn’t need to have that government intervention if we would just do something very simple, as you and I both understand …

Alan Jones: Stop the subsidies.

Terry McCrann: Let us wake up, say the emperor has no clothes, walk away from the Paris Agreement, which is a complete fraud, other than to destroy countries like Australia potentially going forward, and get back to reality. Get back to sanity.

Alan Jones: I don’t know. I was saying to my listeners, this bloke, Terry McCrann … Now Terry, don’t get embarrassed. Is one of the most respected economic commentators in this country. The bloke has been around for God knows how long. He knows the economics of all of this in relation to business, in relation to the costs to business, in relation to the cost and the damage high prices in anything can do to the economy. So there’s not a person in government would speak to him. You’ve got this National Energy Guarantee. I mean, it’s a public lie, Terry.

TerryMcCrann: Well, yes indeed, Alan. I would describe it by using that old American term, it’s desperately trying to put lipstick on a pig, and the pig, of course, is the fundamental stupidity of trying to walk away from the energy system that has been so good for Australia over the last 50 years, delivering cheap, reliable and plentiful power.

Alan Jones: Correct.

Terry McCrann: Obviously coal fired power stations. We’re trying to walk away from that, and we’re trying to embrace the complete uselessness of wind, in particular, and solar.

Alan Jones: Correct.

Terry McCrann: That’s the pig.

Alan Jones: Correct.

Terry McCrann: Unfortunately, you like, you know Josh. I know Josh. You like Josh. I like Josh. I think he’s a nice guy, broadly. He’s got his brains in the right place, but he’s desperately trying to paint lipstick on this pig with this National Energy Guarantee.

Alan Jones: He knows this is rubbish. Josh Frydenberg, you listening to me, mate? You know this is rubbish. You told me it was rubbish, and you’ve fallen into line with Turnbull. You sell your soul. It’s unbelievable that people would do this with the potential to destroy our economy, Terry.

Terry McCrann: Well, if we continue down this path, Alan, we will certainly fundamentally damage the living standards and the employment reality of every Australian and every business.

Alan Jones: But every government, I mean Queensland-

Terry McCrann: Anybody with a brain knows that.

Alan Jones: Everyone, right. Queensland approving more of these wind turbines. New South Wales. Then you’ve got the hypocrisy in the New South Wales budget just brought down recently. Coal royalties, they boasted, are at record levels, 1.8 billion this financial year, two billion next year, over the next four years 7.4 billion. So here we are, mining royalties, well, we’re happy to have them, happy to export the stuff and get the royalties, but deny us the use of the same energy resource.

Terry McCrann: It’s crazy, Alan. But thank goodness that at least they’ve knocked back the greens who want to close down all the coal mines. At least we’re trying to maintain some sense of sanity and some sense of economic reality by at least allowing those coal exports to take place. But anybody that thinks …

Terry McCrann: All of this, and we can see the future today in the disruption and the higher prices that are caused by forcing people to take wind energy when the wind is blowing. So we’ve got to run all these existing power stations, the real power stations. We’ve got to keep them either on standby or operating at a very low level just to be able to be fired up when the wind stops blowing.

Alan Jones: Yeah.

Terry McCrann: All this is happening..

Alan Jones: My old man would say it’s arse up. Pardon the language.

Terry McCrann: Alan, but all this is happening when wind is still such a tiny portion of the system, and yet these idiots, these insane people that are in charge of our government on both sides, want to take that from where it is today and multiply it ten times. They want to increase the amount of wind and solar operating in the system by more than 10 times, by closer to 20 times.

Alan Jones: Correct. Unbelievable.

Terry McCrann: What in Earth is going to happen to our electricity?

Alan Jones: Well, Terry, what is going to happen, because the polls have Labor in front. Labor could form the next government, and Butler, the shadow energy minister, said three days ago, quote, “Labor is committed to supporting a transition to modern, affordable and clean energy with 50% renewables by 2030.” Three days ago.

Terry McCrann: Lovely, but unfortunately, Alan, the other side are only a few steps behind.

Alan Jones: They are.

Terry McCrann: Labor wants to go to 50%. The government wants to go to more than 40%

Alan Jones: 42%.

Terry McCrann: Yeah, so what’s the difference? If we’re going from 5% today, probably more like 7 or 8% now, given what’s happened already, so you’ve got those massive increase. That’s the output. You’ve got to build much more, because it doesn’t work, in order to get that sort of output.

Alan Jones: Absolutely. You ended a piece that you wrote on the 14th of July … Terry McCrann ended a magnificent piece that he wrote on the 14th of July, should’ve been on the front page, and he said this, quote, “All this is fiddling, with apologies to Humphrey Bogart, we must not ‘always have Paris’. The only way to deliver cheap, reliable power is to walk away from the Paris Climate Accord fast.”

Terry McCrann: As indeed the US, China effectively, and India effectively, those three countries, which are the biggest emitters of CO2 on the planet, are not bound by anything in Paris. We know that Donald Trump has taken the US out of the agreement, and the other two don’t have to do anything.

Alan Jones: And look what’s happening to the American economy, to American unemployment, to black unemployment. Once they had that weight taken off their shoulders, they have gone along gangbusters. Terry, all we can do is keep going, but I regret to say, no one in Canberra’s listening to you or me.

Comments

Hi Freddy, I too would recommend everyone to read Tony’s work. Extremely informative and written in a way that even I can understand.

I think that the NEG is about as useless as any policy can get.
It fails on the important objectives….reliability and affordability.
About the only thing it does guarantee is that Australia will become an economic basket case that much quicker.

The NEG has to allow fossil fuel generators free reign in the market. We all know that the subsidies and current rules re retailers using ‘green energy’ when available are killing off the coal generators. This has to stop. Walk away from ‘Paris’ and kill off the subsidies. NOW!

The other thing that should be looked at is to make the energy providers guarantee that they supply if they bid.
If they than fail to supply, the providers should be fined $XX per MW that they fail to deliver. This should apply to any provider. The only exception would be for mechanical failure.

It took regional elections for the Lib/Nats to be “shocked”. Turnbull and his team are committed to renewables. At this point, the Lib/Nats should be dumping Turnbull and his entire team of supporters and embracing fossil fuels. If Turnbull goes into the next election on charge of the Coalition, I expect a retaliatory vote for Labor by many conservatives expecting a huge swing against Labor in the following election and hoping that the damage for the interim is reversible and not catastrophic. Labor and Turnbull’s team are all going in the same direction. May as well encourage Labor and let them be left holding the bag of economic disaster.

This is all about the Enron-ing of Australia. When people who could do something (Turnbull, Frydenberg etc) talk a lot but don’t actually change anything, then you know that what is happening is what is required to happen by those who really run things. I always knew Turnbull would be made a Prime Minister, regardless of which Party he played for. Goldman plays a long game.